Using a PC, the compilation toolchain runs on an x86 processor and generates code for a x86 processor. On most Linux systems, the compilation toolchain uses the GNU libc as C standard library. It is called the "host compilation toolchain", and the machine it is running on is called the "host system". The compilation toolchain is provided by the distribution, and has nothing to do with the OpenWrt build system.

Embedded systems use a different processor and require a cross-compilation toolchain - a compilation toolchain that runs on a host system but that generates code for a target system (and target processor's instruction set architecture (ISA)). For example, if your host system uses x86 and your target system uses MIPS32, the regular compilation toolchain of your host runs on x86 and generates code for x86, while the cross-compilation toolchain runs on x86 and generates code for MIPS32.

While it is possible to manually configure and compile your own software, OpenWrt's build system automates this process to work on the instruction set architecture of most embedded systems.

While the OpenWrt's build system was designed for developers, inexperienced users can also use it to easily build their own custom firmware!

The OpenWrt Makefile has its own syntax, different from the conventional Makefile of Linux make tool. The OpenWrt Makefile defines the meta information of the package, where to download the package, how to compile, where to install the compiled binaries, etc. See How to Build OpenWrt Application Package for more detail.